UNITED STATES
SECURITES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended November 30, 1999
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission File Number: 000-19320
Ag Services of America, Inc.
- ---------------------------------------------------
(Exact name of registrant as specified in its charter)
Iowa 42-1264455
- ---------------------------- ---------------
(State or other jursidiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2302 West First Street, Cedar Falls, Iowa 50613
- ------------------------------------------ ------------
(Address of principal executive offices) (Zip Code)
(319) 277-0261
- ---------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- ---------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
[X] Yes [ ] No
5,238,464 common shares were outstanding as of January 6, 2000.
<PAGE>
AG SERVICES OF AMERICA, INC.
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial statements:
Consolidated condensed balance sheets, November 30, 1999
(unaudited) and February 28, 1999 1
Unaudited consolidated condensed statements of income,
three and nine months ended November 30, 1999
and 1998 2
Unaudited consolidated condensed statements of cash flows,
nine months ended November 30, 1999 and 1998 3
Consolidated statement of stockholders' equity, nine
months ended November 30, 1999 4
Notes to consolidated condensed financial statements
(unaudited) 5-7
Item 2. Management's discussion and analysis of
financial condition and results of operations 8-11
PART II. OTHER INFORMATION
Item 6. Exhibits and reports on form 8-K: 12
(a) Exhibits
(11) Statement re computation of earnings
per common share 13
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AG SERVICES OF AMERICA, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
<CAPTION>
November 30, February 28,
ASSETS 1999 1999 *
(Unaudited)
----------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash $20,191 $67
Customer notes receivable, less allowance
for less allowance for doubtful notes and
reserve for discounts November 30, 1999
$9,322; February 28, 1999 $4,440 200,732 106,211
Accounts receivable 819 515
Inventories 1,594 2,818
Foreclosed assets held for sale 4,331 836
Deferred income taxes, net 872 872
Other current assets 738 3,695
--------- ---------
Total current assets $229,277 $115,014
--------- ---------
LONG-TERM RECEIVABLES AND OTHER ASSETS
Customer notes receivable, less allowance
for doubtful notes November 30, 1999
$2,330; February 28, 1999 $1,755 $25,024 $16,899
Loan origination fees, less accumulated
amortization November 30, 1999 $373,
February 28, 1999 $235 728 352
Deferred income taxes, net 650 650
--------- ---------
$26,402 $17,901
--------- ---------
EQUIPMENT, less accumulated depreciation
November 30, 1999 $1,708;
February 28, 1999 $1,406 $1,989 $1,729
--------- ---------
$257,668 $134,644
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable, including current maturities $166,446 $61,817
Outstanding checks in excess of
bank balances - 9,986
Accounts payable 12,488 1,732
Accrued expenses 2,541 1,553
Income taxes payable - 536
--------- ---------
Total current liabilities $181,475 $75,624
--------- ---------
LONG-TERM LIABILITIES
Notes payable, less current maturities $18,043 $8,483
--------- ---------
STOCKHOLDERS' EQUITY
Capital stock $22,788 $22,595
Retained earnings 35,362 27,942
--------- ---------
$58,150 $50,537
--------- ---------
$257,668 $134,644
========= =========
<CAPTION>
*Condensed from Audited Financial Statements.
<FN>
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
-1-
<PAGE>
<TABLE>
AG SERVICES OF AMERICA, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME
Three and nine months ended November 30, 1999 and 1998
(Dollars in Thousands, Except Per Share Amounts)
<CAPTION>
Three Months Ended Nine Months Ended
November 30, November 30,
1999 1998 1999 1998
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Net revenues:
Farm inputs $18,908 $10,466 $229,279 $170,938
Financing income 7,763 5,981 20,355 16,435
----------- ----------- ----------- ----------
Net Revenues $26,671 $16,447 $249,634 $187,373
----------- ----------- ----------- ----------
Cost of revenues:
Farm inputs $16,942 $8,798 $215,305 $160,334
Financing expense 4,067 2,969 9,849 7,845
Provision for doubtful
notes 452 261 4,562 3,333
----------- ----------- ----------- ----------
Net Cost of Revenues $21,461 $12,028 $229,716 $171,512
----------- ----------- ----------- ----------
Income before operating
expenses and
income taxes $5,210 $4,419 $19,918 $15,861
Operating expenses 2,624 2,262 8,046 6,382
----------- ----------- ----------- ----------
Income before income
taxes $2,586 $2,157 $11,872 $9,479
Federal and state income
taxes 970 751 4,452 3,367
----------- ----------- ----------- ----------
Net income $1,616 $1,406 $7,420 $6,112
=========== =========== =========== ==========
Earnings per share:
Basic $0.31 $0.27 $1.42 $1.18
=========== =========== =========== ==========
Diluted $0.30 $0.26 $1.36 $1.13
=========== =========== =========== ==========
Weighted average shares
outstanding:
Basic 5,236 5,209 5,230 5,201
=========== =========== =========== ==========
Diluted 5,445 5,424 5,448 5,433
=========== =========== =========== ==========
<FN>
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
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<PAGE>
<TABLE>
AG SERVICES OF AMERICA, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Nine Months Ended November 30, 1999 and 1998
(Dollars in Thousands)
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $7,420 $6,112
Adjustments to reconcile net income to net
Cash (used in) operating activities:
Depreciation 317 286
Amortization 132 71
Change in assets and liabilities (87,561) (71,674)
----------- -----------
Net cash (used in) operating activities ($79,692) ($65,205)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of equipment $133 $14
Purchase of equipment (710) (450)
(Increase)in foreclosed assets held for
sale (3,495) (144)
----------- -----------
Net cash (used in) investing activities ($4,072) ($580)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings $214,422 $187,535
Principal payments on borrowings (100,233) (110,510)
(Increase) in loan origination fees (508) -
(Decrease) in excess of outstanding checks
over bank balances (9,986) -
Proceeds from issuance of capital stock,
net 193 267
---------- -----------
Net cash provided by financing activities $103,888 $77,292
---------- -----------
Increase in cash $20,124 $11,507
CASH
Beginning 67 174
----------- -----------
Ending $20,191 $11,681
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest $8,755 $7,034
Income taxes $5,420 $2,502
<FN>
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
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<PAGE>
<TABLE>
AG SERVICES OF AMERICA, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Nine Months Ended November 30, 1999
(Dollars in Thousands)
<CAPTION>
Capital Stock
-----------------------
Shares Retained
Issued Amount Earnings Total
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Balance,
February 28, 1999 5,212,604 $22,595 $27,942 $50,537
Net income - - - - 7,420 7,420
Issuance of 24,750
shares of capital
stock upon the
exercise of options 24,750 177 - - 177
Issuance of 1,100
shares of capital
stock under employee
stock purchase plan 1,110 16 - - 16
----------- ----------- ----------- -----------
Balance,
November 30, 1999 5,238,464 $22,788 $35,362 $58,150
=========== =========== =========== ===========
<FN>
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
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<PAGE>
AG SERVICES OF AMERICA, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in
accordance with the instructions of Form 10-Q and Rule 10-01 of Regulation S-X.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested these interim consolidated
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's Annual Report for the
year ended February 28, 1999. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary for a fair
presentation of the financial position, results of operations and cash flows for
the interim periods presented have been made. Operating results for the three
and nine month periods ended November 30, 1999 are not necessarily indicative
of the results that may be expected for the year ending February 29, 2000.
Principles of Consolidation:
The consolidated financial statements include the accounts of Ag Services of
America, Inc. (the Company) and its wholly owned subsidiary, Ag Acceptance
Corporation. All material intercompany balances and transactions have been
eliminated in consolidation.
According to terms related to the asset backed securitized financing program as
described in Note 3 of the consolidated condensed financial statements, the
Company formed Ag Acceptance Corporation, a wholly owned, special purpose
corporation.
Unless otherwise noted, all amounts present are in thousands except for per
share amounts.
Note 2. Commitments and Contingencies
Commitments:
In the normal course of business, the company makes various commitments that are
not reflected in the accompanying consolidated condensed financial statements.
These include various commitments to extend credit to customers. At November
30, 1999 and February 28, 1999 the Company had approximately $10,773 and
$84,000, respectively, in commitments to supply farm inputs. No material
losses or liquidity demands are anticipated as a result of these commitments.
Contingencies:
The Company is named in lawsuits in the ordinary course of business. Counsel
for the Company has advised the Company, while the outcome of various legal
proceedings is not certain, it is unlikely that these proceedings will result in
any recovery which will materially affect the financial position or operating
results of the Company.
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<PAGE>
AG SERVICES OF AMERICA, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
The availability of lines of credit to finance operations and the existence of a
multi-peril crop insurance program are essential to the Company's operations.
If the federal multi-peril crop insurance program currently in existence were
terminated or negatively modified and no comparable private or government
program were established, this could have a material adverse effect on the
Company's future operations. The government has from time to time evaluated the
federal multi-peril insurance program and is likely to review the program in the
future, and there can be no assurance of the outcome of such evaluations.
Note 3. Pledged Assets and Related Debt
The Company entered into a five-year asset backed securitized financing program
through fiscal 2004, with a maximum available borrowing amount of $275 million.
Under the terms of the five-year facility, the Company sells and may continue
to sell or contribute certain notes receivable to Ag Acceptance Corporation ("Ag
Acceptance"),a wholly owned, special purpose subsidiary of the Company. Ag
Acceptance pledges its interest in these notes receivable to a commercial paper
market conduit entity on $205 million of the facility which incurs interest at
variable rates in the commercial paper market and the remaining $70 million is
a three-year term note with interest at a vaiable cost of LIBOR plus 25 basis
points. The agreement contains various restrictive covenants including,
among others, restrictions on mergers, issuance of stock, declaration or payment
of dividends, transactions with affiliates, and requires the Company to maintain
certain levels of equity and pretax earnings. Advances under the facility are
made subject to portfolio performance, financial covenant restrictions and
borrowing base calculations. At November 30, 1999, the Company had a maximum
amount available under the asset backed securitized financing program of
approximately $31 thousand based on borrowing base computations as provided by
the agreement.
In conjunction with the securitized financing program, the Company maintains
an $8.5 million revolving bank line of credit through fiscal 2000. The line of
credit is accessible to cover any potential deficiencies in available funds
financed through the securitization program. At November 30, 1999, the Company
had a maximum amount available under the agreement of approximately $3.0 million
based on borrowing base computations as provided by the agreement.
During 1998, the Company negotiated an additional bank line of credit with
a maximum available borrowing amount of $12 million. The line of credit is
accessible to cover funding requirements for its intermediate loan program. The
agreement has a two-year term ending February 29, 2000. At November 30, 1999,
the Company had approximately $2.3 million available under the line of credit
based on the borrowing base computation as provided by the agreement.
-6-
<PAGE>
AG SERVICES OF AMERICA, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Note 4. Earnings Per Share
In March of 1997, the Financial Accounting Standards Board (FASB) issued
Statement No. 128, "Earnings per Share". Statement No. 128 replaced the
calculation of primary and fully diluted earnings per share with basic and
diluted earnings per share. Basic earnings per share is computed by dividing
net income available to common stockholders by the weighted average number of
shares outstanding. In computing diluted earnings per share, the dilutive
effect of stock options during the periods presented as well as the effect of
contingently issuable shares also increase the weighted average number of
shares.
-7-
<PAGE>
AG SERVICES OF AMERICA, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The following table sets forth percentages of net revenues represented by the
selected items in the unaudited condensed statements of income of the Company
for the three and nine months ended November 30, 1999 and 1998. In the opinion
of management, all normal and recurring adjustments necessary for a fair
statement of the results for such periods have been included. The operating
results for any period are not necessarily indicative of results for any future
period.
Percentage Percentage
of Net Revenues of Net Revenues
--------------------- ---------------------
Three Months Ended Nine Months Ended
November 30, November 30,
--------------------- ---------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
Net Revenues
Farm inputs 70.9% 63.6% 91.8% 91.2%
Financing income 29.1% 36.4% 8.2% 8.8%
------ ------ ------ ------
100.0% 100.0% 100.0% 100.0%
------ ------ ------ ------
Cost of Revenues:
Farm inputs 63.5% 53.5% 86.3% 85.5%
Financing expense 15.3% 18.1% 3.9% 4.2%
Provision for doubtful
notes 1.7% 1.6% 1.8% 1.8%
------ ------ ------ ------
80.5% 73.2% 92.0% 91.5%
------ ------ ------ ------
Income before operating
expenses and income taxes 19.5% 26.8% 8.0% 8.5%
Operating expenses 9.8% 13.8% 3.2% 3.4%
------ ------ ------ ------
Income before income taxes 9.7% 13.0% 4.8% 5.1%
Federal and state income taxes 3.6% 4.0% 1.8% 1.8%
------ ------ ------ ------
Net Income 6.1% 8.4% 3.0% 3.3%
====== ====== ====== ======
Net Revenues:
Net revenues increased $10.2 million or 62.2% during the three months ended
November 30, 1999, compared with the three months ended November 30, 1998. Net
revenues increased $62.3 million or 33.2% during the nine months ended November
30, 1999, compared with the nine months ended November 30, 1998. The Company
reached this record level through greater market penetration with the increased
name recognition gained by the Company's Agri-Flex(R) Credit program in its 30
state market area. Financing income as a percentage of net revenue decreased
slightly to 29.1% and 8.2% for the three and nine months ended November 30,
1999, respectively, from 36.4% and 8.8% for the
-8-
<PAGE>
same periods of the previous year. This decline was primarily a result of a
decrease in the prime lending rate by approximately 50 basis points, which is
the base rate used by the Company to charge interest on a variable rate basis
to its customers, as compared to a year ago and a decline in volume under the
Company's servicing and marketing agreeement.
Cost of Revenues:
The total cost of revenues increased to 80.5% and 92.0% of net revenues for
the three and nine months ended November 30, 1999 as compared to 73.2% and
91.5% for the three and nine months ended November 30, 1998. The gross margin
on the sale of farm inputs decreased to 10.4% and 6.1% for the three and nine
months ended November 30, 1999 compared to 15.9% and 6.2% for the three and
nine months ended November 30, 1998. The decline in gross margin on the sale
of farm inputs was a result of a change in farm input sales mix for the three
months ended November 30, 1999. The change in sales mix for the third quarter
of fiscal 2000 had only a minimal impact on the gross margin on farm inputs
for the nine months ended November 30, 1999. Concerning the gross margin on
financing income alone, the percentages decreased to 47.6% and 51.6% for the
three and nine months ended November 30, 1999 from 50.4% and 52.3% for the
three and nine months ending November 30, 1998. The decrease in gross margin
percentage from last year was the result of the Company's ability to finance
a greater percentage of the Company's revenues with the $275 million
securitization program. The provision for doubtful notes increased slightly
to 1.7% and 1.8% of net revenues for the three and nine months ended November
30, 1999 compared to 1.6% and 1.8% for the three and nine months ended
November 30, 1998. The increase in provision for doubtful notes for the
three months ended November 30, 1999 when compared to the same period last
year, was a result of the Company reserving an additional $100 by increasing
its accrual for doubtful accounts in line with market conditions earlier in
the year.
Operating Expenses:
Operating expenses decreased to 9.8% and 3.2% of net revenues for the three and
nine months ended November 30, 1999 from 13.8% and 3.4% for the three and nine
months ended November 30, 1998. The decrease in operating expenses as a
percentage of net revenues is a result of gains in operating efficiencies. The
increase in operating expenses is attributed primarily to the Company's growth.
Payroll and payroll related expenses increased to $1,644 and $5,054 for the
three and nine months ended November 30, 1999 from $1,344 and $3,957 for the
three and nine months ended November 30, 1998.
Net Income:
Net income increased 14.8% to $1,615 for the three months ended November 30,
1999 from $1,407 for the three months ended November 30, 1998 and 21.4% to
$7,420 for the nine months ended November 30, 1999 from $6,112 for the nine
months ended November 30, 1998. The increase in net income is attributable to
the increase in net revenues and the decline in operating expenses as a
percentage of net revenues. The percentage increase in net income was less
than the increase in revenue due to the larger percentage increase in farm
input revenue over the percentage increase in financing income as discussed
above. Also contributing to the decline was the increase in federal tax
expense being at the maximum level due to greater earnings.
Inflation:
The Company does not believe the Company's net revenues and income from
continuing operations were significantly impacted by inflation or changing
prices in fiscal 1999 or the first nine months of fiscal 2000.
-9-
<PAGE>
Seasonality:
The Company's revenues and income are directly related to the growing cycle for
crops. Accordingly, quarterly revenues and income vary during each fiscal year.
The following table shows the Company's quarterly net revenues and net income
for fiscal 1999 and the first three quarters of fiscal 2000. This information
is derived from unaudited financial statements, which include, in the opinion of
management, all normal and recurring adjustments which management consider
necessary for a fair statement of results of those periods. The operating
results for any quarter are not necessarily indicative of the results for any
future period.
Fiscal 2000 Quarter Ended
--------------------------------------------------
May 31 August 31 November 30 February 29
--------- ----------- -------------- -----------
(Dollars in thousands)
Net revenues $133,783 $89,180 $26,671
Net income $3,077 $2,727 $1,616
Fiscal 1999 Quarter Ended
--------------------------------------------------
May 31 August 31 November 30 February 28
-------- ----------- -------------- ------------
(Dollars in thousands)
Net revenues $101,529 $69,397 $16,447 $37,920
Net income $2,429 $2,276 $1,406 $381
Except for the Dakotas, the Company's primary market area experienced a normal
1999 crop planting season. Wet weather conditions in the Dakotas have caused
reduced sales of fertilizer and chemicals, as well as some shifting from corn
to soybean production.
Liquidity and Capital Resources:
At November, 1999 the Company had working capital of $47,802 an increase of
$12,085 over a year ago and an increase of $8,412 since February 28, 1999.
The components of this net increase, since February 28, 1999, were (i) $8,929
resulting from operating activities, consisting of approximately, $7,420 in net
income, $317 in depreciation, $132 in amortization, and the remainder from a
net change in other working capital items, (ii) capital expenditures of
approximately $710 related to the acquisition of equipment and furniture, and
(iii) net proceeds of $193 from the issuance of common stock upon exercise of
options and sales of stock through the employee stock purchase plan.
The Company entered into a five-year asset backed securitized financing program
through fiscal 2004, with a maximum available borrowing amount of $275 million.
Under the terms of the five-year facility, the Company sells and may continue
to sell or contribute certain notes receivable to Ag Acceptance Corporation
("Ag Acceptance"), wholly owned, special purpose subsidiary of the Company. Ag
Acceptance pledges its interest in these notes receivable to a commercial paper
market conduit entity on $205 million of the facility which incurs interest at
variable rates in the commercial paper market and the remaining $70 million is
a three-year term note with interest at a variable cost of LIBOR plus 25 basis
points. The agreement contains various restrictive covenants, including, among
others, restrictions on mergers, issuance of stock, declaration or payment of
dividends, transactions with affiliates, and requires the Company to maintain
certain levels of equity and pretax earnings. Advances under the facility are
made subject to portfolio performance, financial covenant restrictions and
borrowing base calculations. At November 30, 1999 the Company had a maximum
-10-
<PAGE>
amount available under the asset backed securitized financing program of
approximately $31 thousand, based on borrowing base computations as provided by
the agreement.
In conjunction with the securitized financing program, the Company will maintain
an $8.5 million bank line of credit in fiscal 2000. The line of credit is
accessible to cover any potential deficiencies in available funds financed
through the securitization program. All borrowing are collateralized by
substantially all assets of the Company. The agreement also requires that total
outstanding borrowings be repaid in full for 10 consecutive days during the
Company's second fiscal quarter. The agreement contains various restrictive
covenants, including, among others, restrictions on mergers, issuance of stock,
declaration or payment of dividends, loans to stockholders, and requires the
Company to maintain certain levels of equity and pretax earnings. At November
30, 1999, the Company had a maximum amount available under the agreement of
approximately $3.0 million based on borrowing base computations as provided by
the agreement.
During 1998, the Company negotiated an additional bank line of credit with a
maximum available borrowing amount of $12 million. The line of credit is
accessible to cover the Company's funding requirements for its intermediate
loan program. All borrowings are collateralized by substantially all assets
of the Company. The agreement contains various restrictive covenants,
including, among others, restrictions on mergers, issuance of stock,
declaration or payment of dividends, loans to stockholders, and requires the
Company to maintain certain levels of equity and pretax earnings. Advances
under the line of credit agreement are also subject to portfolio performance,
financial covenant restrictions, and borrowing base calculations. At November
30, 1999 approximately $2.3 million was available based on the borrowing base
computation as provided by the agreement.
Management believes that the financial resources available to it, including its
bank line of credit, trade credit, its equity and internally generated funds,
will be sufficient to finance the Company and its operations in the foreseable
future. The Company currently has no significant capital commitments.
Year 2000:
As of this report date, all of the Company's information systems appear to be
operational subsequent to the millenium change. There were no internal system
disruptions caused by the changeover from year 1999 to year 2000 and to date
have noticed no third party system failures. The Company will continue to
monitor the situation for any internal or third party system disruptions, but
expects none at this time. Costs incurred by the Company to prepare internal
systems for the Year 2000 were funded with cash from operations totaling
approximately $30 thousand dollars. These costs exclude the costs associated
with information specialists already on staff.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995
Information contained in this report, other than historical information,
should be considered forward looking which reflect Management's current
views of future events and financial performance that involve a number of
risks and uncertainties. The factors that could cause actual results to
differ materially include, but are not limited to, the following: general
economic conditions within the agriculture industry; competitive factors
and pricing pressures; changes in product mix; changes in the seasonality
of demand patterns; changes in weather conditions; changes in agricultural
regulations; technological problems; the amount and availability under its
asset backed securitization program; unknown risks; and other risks detailed
in the Company's Securities and Exchange Commission filings.
-11-
<PAGE>
AG SERVICES OF AMERICA, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(11) Statements re computation of earnings per common share is attached.
(b) Reports on From 8-K
No reports on Form 8-K were filed during the period covered by this
report.
Signatures
Pursuant to the requirements of the securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AG SERVICES OF AMERICA, INC.
(Registrant)
/s/ Brad D. Schlotfeldt
Brad D. Schlotfeldt
Vice President of Finance & Treasurer
(Principal Financial and Accounting Officer)
Date: January 14, 2000
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<TABLE>
AG SERVICES OF AMERICA, INC.
EXHIBIT 11
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
<CAPTION>
Three Months Ended Nine Months Ended
November 30, November 30,
---------------------- ----------------------
1999 1998 1998 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Computation of weighted
average number of basic
shares:
Basic:
Common shares outstanding
at beginning of the
period 5,233,864 5,209,304 5,212,604 5,177,154
Weighted average number
of shares issued during
the period 2,633 146 17,653 24,315
---------- ---------- ---------- ----------
Weighted average shares
outstanding, (basic) 5,236,497 5,209,450 5,230,257 5,201,469
========== ========== ========== ==========
Net income $1,615,345 $1,406,911 $7,419,688 $6,112,434
========== ========== ========== ==========
Basic earnings per share $0.31 $0.27 $1.42 $1.18
========== ========== ========== ==========
Diluted:
Common shares outstanding
at beginning of the
period 5,233,864 5,209,304 5,212,604 5,177,154
Weighted average number
of shares issued during
the period 2,633 146 17,653 24,315
Weighted average of
potential dilutive shares
computed using the
treasury stock method
using the average market
price during the period:
Options (1) 208,274 214,436 217,641 231,658
----------- ----------- ----------- ----------
Weighted average shares
outstanding, (diluted) 5,444,771 5,423,886 5,447,898 5,433,127
=========== =========== =========== ==========
Net income $1,615,345 $1,406,911 $7,419,688 $6,112,434
=========== =========== =========== ==========
Diluted earnings per share $0.30 $0.26 $1.36 $1.13
=========== =========== =========== ==========
<CAPTION>
(1) Some of the stock options have not been included because they are
antidilutive.
</TABLE>
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
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